Epic, Meditech gain U.S. hospital market share as other EHR vendors lose ground

EHR
Epic and Cerner now have more than 50% market share of the acute care market. Combined with Meditech, they control close to 75% of the market. (Rostislav_Sedlacek/Getty)

Electronic health record (EHR) giant Epic continued to amass a greater share of the U.S. hospital market in 2019, while its competitor Cerner lost ground, according to KLAS Research.

Meditech was the only other major vendor to see a net gain in 2019, growing its hospital market share by 29 facilities, according to a KLAS Research report looking at the U.S. hospital market share among EHR vendors.

Epic gained 55 hospitals in 2019 and now has 29% of the hospital market. That's up from 28% last year, according to KLAS.

Cerner lost five organizations, and its acute market share fell by 0.2%. The company maintains a 26% market share.

Meditech's market share stands at 17%, up from 16% in 2019.

Epic and Cerner now have more than 50% market share of the acute care market. Combined with Meditech, they control close to 75% of the market. 

Cerner, CPSI, Medhost and Allscripts all experienced a net decrease in market share, KLAS reported.

KLAS based its market share analysis on acute care EMR executed contracts that occurred in the U.S. from Jan. 1 to Dec. 31, 2019. The report looks at vendors in use at 5,457 acute care hospitals.

RELATED: Epic, Cerner growing EHR market share with increased hospital consolidation: KLAS

Meditech has seen net market share growth in the two of the last three years. Many community hospitals have contracted to migrate to the company's Expanse EHR platform. One large organization also chose to consolidate to Expanse, creating the opportunity for the market to assess how Expanse scales to more complex environments, KLAS said.

The company reported its third straight year of revenue growth during its year-end earnings call in February, after a three-year backslide. The Massachusetts-based company vendor reported $493.8 million in revenue in 2019, a 1.2% increase from the previous year’s $488.2 million.

The company credited last year’s performance to higher bookings which generated $9.3 million in revenue, offset by a $3.5 million reduction in product revenue due to initial implementation delays.

The remaining U.S. hospital EHR market share stands at: CPSI, 9%; Allscripts, 6%; Medhost, 4%; and "other" vendors, 9%, according to KLAS.

Historically, Cerner has been the only vendor besides Epic to add hospital market share each year, KLAS said.

However, in 2019, four large organizations left Cerner, and with no government contracts to make up the loss, Cerner saw a net decrease in market share for the first time since KLAS began tracking losses in 2010.

RELATED: Cerner's Q1 revenue grows to $1.4B but misses target due to impact of COVID-19

This decrease is especially notable in terms of number of beds, the company said.

When looking at market share among the 880,000 beds in acute care multispecialty hospitals, Epic has a 39% market share compared to Cerner's 29% share.

"Epic’s market share continued to grow across organizations of all sizes in 2019—it now accounts for just under 40% of the acute care beds in the United States," KLAS researchers wrote in the report. "Just over half of Epic’s wins were competitive decisions; the remainder were the result of standardization and acquisition. Seven small hospitals chose Epic’s Community Connect offering."

According to KLAS, the primary reasons hospitals left Cerner were to standardize to Epic as well as "Cerner’s lack of tangible improvements to the revenue cycle solution."

Cerner won the most standalone facilities in 2019; most of these organizations are smaller organizations that value Cerner’s robust clinical system and ability to scale to the needs of smaller hospitals, KLAS said.

RELATED: Meditech rebound continues as the EHR vendor expands partnerships with tech giants

Cerner took issue with the KLAS report, noting that it captures a "limited view" of the company's U.S. business.

“Cerner remains a global health care technology leader uniquely positioned to help shape the future of care beyond the traditional acute care market," a Cerner spokesperson said in an emailed statement in response to the report.

"As demonstrated throughout the pandemic, the health care industry is in need of an agile health IT partner who thrives across the continuum," she said. "Cerner continues to work at an accelerated pace to provide innovation, technology, and data analysis across many care venues, and our technology will continue to be prominent as our clients navigate the undoubtedly changing landscape beyond this pandemic."

Health IT vendor Athenahealth exited the small hospital market in late 2019, leaving a void in that market. 

Many of these organizations will likely be looking to make a go-forward EMR decision in coming years, KLAS said. It's likely that major EHR vendors will look to capture this customer base.

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